Sensex slide continues

The stock indices dipped further on Thursday following concerns on higher cost of borrowing by banks and falling corporate earnings.

The S&P BSESensex lost 285.92 points or 1.42 per cent to close at 19804.76. The Sensex touched a two-and-a-half year high at 20302.13 last Tuesday. Since then it was showing weakness after the Reserve Bank of India (RBI) announced measures to stem the fall of rupee, which had an upward impact on interest rates.

The fall was led by fast moving consumer goods (FMCG) stocks which lost 3.33 per cent followed by metal 1.73 per cent, healthcare 1.64 per cent, oil & gas 1.35 per cent and capital goods 1.34 per cent. Except technology stocks, which gained marginally by 0.21 per cent and automobiles which was up 0.14 per cent, all other sectoral indices ended in the negative territory.

On the National Stock Exchange (NSE), Nifty closed at 5907.50 with a loss of 83 points or 1.39 per cent.

FMCG stocks dragged the Sensex on Thursday as earnings of ITC was below market expectations.

However, the highlight of the day was banking stocks which witnessed long rollovers after Wednesday’s wash out. The only saving grace was select telecom and auto stocks which bucked the negative trend.

“Market continued its downward slide on Thursday partially fuelled by negative global cues as the Dow and S&P 500 had finished in the negative territory,” said Sanjeev Zarbade, Vice President-private client group research at Kotak Securities. “It was also expiry day for Indian derivatives.”

“ITC was down by over 4 per cent post its Q1 results,” said Nidhi Saraswat, a senior research analyst at Bonanza Portfolio.

Meanwhile, the rupee strengthened against the dollar as RBI’s measures have an impact on sucking out liquidity from the system while short-term interest rates have firmed up in Government Securities (G-Sec) sales. The rupee on Thursday closed at 59.11/12 a dollar compared to 59.13/14 on Wednesday. It touched an intra-day high of 58.76.